A Look Back at the Performance of the Holy Grail

Aim: To introduce the “Holy Grail” market timing model as a tool to demonstrate how one can beat the market by following price trends and achieve long-term financial gains.

Outcome: Completion of this module will enable investment advisers to:

  • Explain the “Holy Grail” market timing model as a theory of investment; and
  • Identify factors that underlie the Holy Grail model’s success

Abstract: The pitfalls of the traditionally favoured buy-and-hold investment strategies over active or tactical investment strategies are discussed. The Holy Grail market timing model and how it works to avoid some of the pitfalls of traditional strategies is described. Using the Holy Grail market timing model, and Robert Shiller’s S&P 500 data series over the 140 year period from 1871 to 2012, how the model achieves capital preservation in bad times and capital appreciation in good times is explained. The factors that underlie the Holy Grail model’s success over the conventional buy-and-hold strategies are identified.